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Samsung Electronics and LG Electronics have agreed for the first time on a cross-purchasing deal for LCD panels
for televisions.

The world's first and second makers of LCD panels are
expecting to take advantage of each other investments in
different LCD product lines in order to offer their
customers a wider variety of LCD panel sizes.

Under the deal, Samsung will buy 37-inch LCD panels from
LG Display, a subsidiary of LG Electronics, while LG will
buy 52-inch panels manufactured by Samsung.

The two companies are also exploring a cross-purchasing
system in which Samsung Electronics' LCD division and LG
Display's panel division would buy each other's LCD
modules and cells on a regular basis.

The 37-inch LCD panels are currently manufactured only by
LG Display and Taiwanese firms such as Au Optronics
Corporation and Chi Mei Optoelectronics. Samsung had been
sourcing all of its panels of this size from the
Taiwanese firms, while LG Electronics had imported 34
percent of its 52-inch panels from Taiwan.

The deal is expected to be finallized in June. Without
any doubt, the deal between the two S. Korean "rivals" is
benefiting Taiwanese firms.

In related news, LG Display plans a massive plant
expansion by investing 1 trillion won (US$957.4 million)
to increase production at its plant, the company said on Thursday.

The output of the plant will be raised to 230,000 panels
a month from the current 170,000, with the increase to be
mostly used for the production of monitors for desktop
and laptop computers.